Two major trends have been confirmed over last weekend’s EU summit, including the discussion of further sanctions against Russia. The first trend is that making important decisions within the current framework of the European Union continues to be much more difficult than any major political union would like.
UK’s Prime Minister, David Cameron, voiced a proposal to block Russian banking access to the system of the Society for Worldwide Interbank Financial Telecommunication, a.k.a. SWIFT on Saturday.
The resulting response by German Chancellor, Angela Merkel, after the EU summit, was that a discussion about imposing such a move against Russia had not transpired during the weekend summit.
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The second trend is that Russia is once again acting prepared for the potential threat. Just as after the previous round of sanctions imposed by the EU, the Russian government enacted counter sanctions to show off its commitment to cause an equal (if not worse) amount of pain to its major trading partners from the European Union.
Last week, the Russian Central Bank and the government’s financial and economic departments stated that a bill has been drafted to create a Russian analog of the SWIFT international financial message system.
According to a statement made by Deputy Finance Minister, Alexei Moiseyev, last Wednesday, the government prepared the bill in consultation with the local banking community and the Bank of Russia.
Concerns of the Russian government that the country may be excluded from the SWIFT payment system proved to be adequate as Mr. Cameron spoke quite hawkishly over the weekend. He stated, “We have to show real reliance and resolve. Russia needs to understand that if it continues on the current path, its relationship with the rest of the world will be radically different in the future.”